A study of the differential effectiveness of two residential programs for the treatment of seriously disturbed, chronic psychiatric patients is proposed. One hundred-fifty patients evaluated as being in need of hospitalization are randomly assigned either to a psychiatric in-patient unit or to an Emergency Housing Program (EHP). Both prior and subsequent to their participation in the standard treatment regimes of each of these programs, the clinical status and social functioning of subjects are assessed from the multiple viewpoints of patient himself, clinical evaluator, and independent researcher. In addition, a variety of process measures are collected during the patients' stays at the treatment site (generally less than two weeks). One month after discharge, subjects are re-interviewed in order to assess interim psychiatric and social role functioning. Of additional interest at this follow up are the determinations of recidivism and participation in after-care, two variables that are polled again one year post-discharge. Considerable evidence exists suggesting that alternatives to hospitalization are successful for some patients. The major problem is that previous studies have not identified the clinical and social characteristics of patients who appear to require hospitalization but could equally benefit from a less expensive, alternative treatment. This investigation proposes to delineate patient and treatment characteristics in a psychiatric in-patient service and an alternative treatment service, an EHP, towards the end of identifying the persons for whom each treatment is most appropriate. Secondly, a manual will be developed detailing the clinical personnel and services needed for the type of alternative proposed. This anual provides guidelines regarding the clinical, social and symptomatic characteristics of patients predictive of ability to benefit from the EHP alternative. Results will demonstrate that the growing number of admissions and re-admissions to psychiatric hospitals can be reduced, replaced by less costly but equally effective care in alternative treatment centers. Additionally, clinician anxiety over not hospitalizing acutely psychotic patients can be allayed by offering specific descriptions of those patients who will benefit from an alternative treatment.